Correlation Between Cisco Systems and GENERAL
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By analyzing existing cross correlation between Cisco Systems and GENERAL MLS INC, you can compare the effects of market volatilities on Cisco Systems and GENERAL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cisco Systems with a short position of GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and GENERAL.
Diversification Opportunities for Cisco Systems and GENERAL
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cisco and GENERAL is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and GENERAL MLS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL MLS INC and Cisco Systems is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cisco Systems are associated (or correlated) with GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL MLS INC has no effect on the direction of Cisco Systems i.e., Cisco Systems and GENERAL go up and down completely randomly.
Pair Corralation between Cisco Systems and GENERAL
Given the investment horizon of 90 days Cisco Systems is expected to generate 0.59 times more return on investment than GENERAL. However, Cisco Systems is 1.7 times less risky than GENERAL. It trades about 0.06 of its potential returns per unit of risk. GENERAL MLS INC is currently generating about -0.01 per unit of risk. If you would invest 4,741 in Cisco Systems on August 31, 2024 and sell it today you would earn a total of 1,180 from holding Cisco Systems or generate 24.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 55.08% |
| Values | Daily Returns |
Cisco Systems vs. GENERAL MLS INC
Performance |
| Timeline |
| Cisco Systems |
| GENERAL MLS INC |
Cisco Systems and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and GENERAL
The main advantage of trading using opposite Cisco Systems and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, GENERAL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GENERAL will offset losses from the drop in GENERAL's long position.| Cisco Systems vs. Juniper Networks | Cisco Systems vs. Nokia Corp ADR | Cisco Systems vs. Motorola Solutions | Cisco Systems vs. Ciena Corp |
| GENERAL vs. AEP TEX INC | GENERAL vs. US BANK NATIONAL | GENERAL vs. Bank of America | GENERAL vs. GE Aerospace |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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